Brexit 'a sideshow' amid rising political risk in London market: Richard Dearlove

Ascot's non-executive chairman Richard Dearlove believes Brexit is “a sideshow” and is likely to have a minimal impact on the London re/insurance market.

“The London insurance industry is a global industry, not a European industry, so the effect of Brexit will probably be very small,” Dearlove said speaking at the Marsh & McLennan Companies Rising Professionals’ Global Forum 2019 this week.

He added that Lloyd’s decision to set up an European operation was a “nice publicity but not essential”.

The former head of MI6 said Brexit has elevated interest in political risk in the London market but it is still often overlooked at an industry level, warning that “we are now heading for a eurozone crisis”.

“I was surprised when I came into insurance to discover pockets of expertise among those who specifically work in political risk or terrorism insurance, but a general disinterest in the bigger picture within the wider industry, other than where it affects big strategic issues,” he said.

The world is “living through a watershed moment in international affairs,” and that “political risk is relevant to everyone working in insurance,” Dearlove continued.

He suggested that the West’s relationship with China would be central to ensuring a successful transition, but warned that allowing Chinese telecoms giant Huawei to help build the UK’s G5 network posed a national security threat.

“Despite the extraordinary meltdown we are currently seeing in the liberal order, financial markets are remarkably complacent. There seems to be very high tolerance for political risk and international business has proven more impervious than we all expected,” he said.